Early Distributions from Retirement Plans: What to know
Whether it’s a 401(k) or IRA; if you need to access your qualified retirement funds prematurely, you will likely pay a stiff penalty.
If you take a distribution from your retirement plan early (meaning before the day you turn 59 1/2) you will generally have to pay a 10% early distribution tax above and beyond any regular income taxes you may owe on the withdrawal, which is included in your taxable income. That extra 10% might be called a tax, but in reality it is just an early withdrawal penalty. In fact,… Continue reading
Received an IRS Notice? Here’s what to do.
Each year the IRS sends millions of letters and notices to taxpayers. Although some people may feel anxious when they receive one, many are able to be resolved. Here’s what to do if you receive a letter or notice from the IRS:
1) There are many reasons the IRS sends notices to taxpayers. The notice usually covers a specific issue about your account or tax return. It may request payment of taxes, notify you of a change to your account or ask for additional information.
2) Don’t panic. Follow the instructions in… Continue reading
Tax implications of a C Corporation converting to an S Corporation
There are basically two tax options for a corporation. A regular corporation (or C corporation) pays tax on its earnings at the corporate level. Then, a second tax is paid when those same earnings are distributed as dividends to the shareholders. This system of double taxation is precisely the reason why many people choose S corporation status, as S Corporations pay no tax on their own at the corporate level. Rather, the S corporation income flows through to the shareholders, and they pay the tax personally at the individual… Continue reading
With April 15th right around the corner, we are here to assist you in getting your tax return or extension filed!
Q: Let’s get everyone on the same page – what is the actual deadline for filing your taxes?
A: You have until Wednesday, April 15th to send in your tax return. Whether you are filing by snail mail or online, remember your return must be postmarked or time-stamped by 11:59 pm. I recommend my clients file their returns electronically. That will help you avoid long lines at the post office, and if you’re expecting… Continue reading